Pister v. Dept. of Revenue
Annotate this CaseThe State Department of Revenue sought to hold the sole shareholder, director, and employee of a closely held Washington corporation personally liable for the corporation’s unpaid tax debts. The superior court pierced the corporation’s corporate veil, ruled that the shareholder’s successor corporation was liable for the tax debt, voided two contract transfers as fraudulent conveyances, and ruled that the shareholder had breached fiduciary duties to the corporation and the State as the corporation’s creditor. The shareholder and corporation appealed the superior court’s decision to pierce the corporate veil, arguing that the superior court erred by not barring the State’s suit under the principle of res judicata, by applying Alaska rather than Washington veil-piercing law, and by making clear factual errors. The shareholder and corporation also appealed the superior court’s finding that two contracts were fraudulently conveyed. After review, the Alaska Supreme Court concluded that res judicata did not bar the State from seeking to pierce the corporation's corporate veil to collect tax debt established in an earlier case. Furthermore, the Court held that the corporation's veil was properly pierced under both Alaska and Washington state law. Though the superior court's fraudulent conveyance determination contained errors of fact, the Supreme Court concluded that those errors were harmless. Therefore, the Court affirmed the superior court in part, reversed in part, and remanded for further proceedings.
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